The resignation of Chris Huhne, following his guilty plea to the charge of perverting the course of justice, is bad news first for the way politics is seen in Britain. Just as the expenses affair did not merely discredit those individual MPs guilty of misconduct but the entire political class, so Huhne's admission damages all politicians. The cynics have long charged that you can't believe a word that comes out of their mouths and Huhne will be cited as Exhibit One. He repeatedly told interviewers to their face that he was innocent, maintaining that front until the very end. Yet now we have his word for it: he lied.

The more specific casualty will, inevitably, be his party. The Lib Dems already had a serious trust problem, thanks to Nick Clegg's broken promises – the pledge over tuition fees being the most blatant. Huhne, who came within a whisker of beating Clegg to the leadership, is now exposed as a deceiver of a graver variety. It will be very hard for senior Lib Dems to utter the words "trust us" without having either a Huhne gag or a tuition fees reminder thrust back in their face.

The party will now go into a byelection campaign hoping to limit the damage. If they manage to win the seat in such inauspicious circumstances, that will be a large boost to morale. The number crunchers say the party's prospects are better than you might think, noting that Huhne's former constituency of Eastleigh is one of the few places where the Lib Dems have gained council seats since the coalition was formed in 2010. They outnumber Tories in the chamber there by 40 to 4. But byelections are unpredictable. If that advantage is somehow overturned, it will have Lib Dems contemplating the wipeout that could face them in 2015.

That sound you can already hear is political observers licking their chops, for Eastleigh offers up the intriguing prospect of a dogfight between the two coalition parties: a Tory-Lib Dem marginal. There are dangers here for David Cameron. If he campaigns hard, getting stuck in personally, and doesn't win, it will strengthen the malcontents currently branding him a loser. If he keeps his distance, those same malcontents will accuse him of playing soft to make things easier for his Lib Dem partners (a repeat of the accusation made during 2011's Oldham East and Saddleworth byelection). So he will need to throw everything at winning, which could mean a very testy February around the coalition cabinet table.

The wild card, as so often, is Ukip. Nigel Farage is already under pressure to stand. If he doesn't, he'll look "frit". He needs to do what smaller parties – the Greens, Respect – have already achieved and win a Westminster seat. But if he stands and loses, that would slow Ukip's current momentum. Worse, if his candidacy were to divide the Tory vote and let in the Lib Dem then Cameron has a debating point that he will milk hard: this is what happens when you play games and don't vote Tory.

Watching it all will be Labour. Ed Miliband can choose to let the other parties take lumps out of each other, knowing that Labour's 10% vote in 2010 leaves little pressure on him to do well. Or he can do all he can to persuade erstwhile tactical voters that it's time they came home to Labour – that voting Lib Dem to stop the Tory makes no sense in the era of coalition. A strong Labour showing in a southern English seat will be the perfect start for Miliband's 2013.

And to think all this was set in train by a series of stupid, utterly avoidable decisions by one man. That's the thing about politics. They call it science, but it's all too human.